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Friday, December 18, 2009

Equities were under pressure from the get-go in Thursday's session, skittish from a weaker than expected jobless claims report, an earnings miss from FedEx, and heavy selling of Citigroup stock on a disappointing pricing of its stock offering. The real story, however, was the dollar, which surged aggressively higher, sending gold prices plunging as a result. The day's selling hit commodities-related stocks particularly hard, but other groups such as agriculture names and the education sector also suffered sharp losses. Energy and alternative energy stocks held up relatively well, and most leading stocks in general pulled back only modestly. Healthcare, retail, and restaurant stocks also seemed unfazed by the greater market's pessimistic mood.

As it is, the market's signals remain mixed, and the major indices remain trapped in the same trading range they've whipped back and forth in for more than a month now. Let's take a look at some of the day's key players and some important support and resistance levels that were touched and should be monitored going forward.

Both GLD and GDX are testing trendline support that can be easily seen on these line charts based on their closing prices.

Next up is a chart of the dollar, showing Thursday's high touching well-established resistance that we've looked at before.

We can also see that EUR/USD, which has been in a free fall, tested some horizontal support on Thursday.

And last but not least, a close-up look at the S&P 500's recent gyrations shows the Thursday low filling a gap nearly to the penny. There is often some support at gap fills, although given its location in the middle of the established trading range, its significance may be limited. The market bounced almost immediately upon closing the gap, but slipped back near session lows by the end of the day.

That's it for now. It will be important to see whether resistance for the dollar and support for gold can hold near-term or not. Keep in mind it is an options expiration Friday.

Equities were under pressure from the get-go in Thursday's session, skittish from a weaker than expected jobless claims report, an earnings miss from FedEx, and heavy selling of Citigroup stock on a disappointing pricing of its stock offering. The real story, however, was the dollar, which surged aggressively higher, sending gold prices plunging as a result. The day's selling hit commodities-related stocks particularly hard, but other groups such as agriculture names and the education sector also suffered sharp losses. Energy and alternative energy stocks held up relatively well, and most leading stocks in general pulled back only modestly. Healthcare, retail, and restaurant stocks also seemed unfazed by the greater market's pessimistic mood.

As it is, the market's signals remain mixed, and the major indices remain trapped in the same trading range they've whipped back and forth in for more than a month now. Let's take a look at some of the day's key players and some important support and resistance levels that were touched and should be monitored going forward.

Both GLD and GDX are testing trendline support that can be easily seen on these line charts based on their closing prices.

Next up is a chart of the dollar, showing Thursday's high touching well-established resistance that we've looked at before.

We can also see that EUR/USD, which has been in a free fall, tested some horizontal support on Thursday.

And last but not least, a close-up look at the S&P 500's recent gyrations shows the Thursday low filling a gap nearly to the penny. There is often some support at gap fills, although given its location in the middle of the established trading range, its significance may be limited. The market bounced almost immediately upon closing the gap, but slipped back near session lows by the end of the day.

That's it for now. It will be important to see whether resistance for the dollar and support for gold can hold near-term or not. Keep in mind it is an options expiration Friday.

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